Sometimes it is better to take back control, while other times it’s better to leave it in the hands of experts.
Since the dawn of paid-for search advertising–a means of advertising that requires more data-led savvy as opposed to bulk-buying power of traditional media agencies–the in-housing narrative has gone to and fro.
In-housing, where a brand takes media-buying responsibilities out of the hands of its media agency, is not a new phenomenon. But in light of the controversial K2 Intelligence report for the Association of National Advertisers in 2016, which challenged the traditional agency-client relationship and probed transparency in media-buying practices, the advent of automated trading piqued the interest of marketing procurement professionals.
Many brands have been eager to trumpet the success of their in-housing operations. However, for every account of double-digit savings with such efforts, there are as many anecdotes of U-turns. Simply put, operating a digital media-buying unit is hard, and marketers should think carefully before taking it under their roof.
Decline in trust
Brands that have bought into the in-housing craze include EA, Netflix, Procter & Gamble and Target.
Rob Webster, co-founder of Canton Marketing Solutions and long-time former GroupM executive, explained that marketers’ attitudes to in-housing have changed over the last 20 years.
Per Webster, during the mid-2000s, advertisers started giving out a lot of paid search and SEO to independent agencies, but around 2010, the big agencies started to buy independents outfit. This consolidated a lot of power into the hands of the Madison Avenue stalwarts. The faith that advertisers placed in agencies was, at that point, at an all-time high, but questions around transparency soon emerged.
“What went wrong from there was the ANA report and from there a lot of trust broke down,” Webster added. “But at that time, a lot of advertisers had nowhere else to go, as a lot of the independents were just too weak to run media globally.”
Since then, a multitude of boutique operations plus platform specialists such as Mightyhive, an outfit recently acquired by Martin Sorrell-owned S4 Capital, have helped spur an uptick of the in-housing trend.
Efficiencies, but not just about pricing
A 2018 ANA study claimed 36% of its membership uses an in-house agency to execute media activity–up from 22% five years earlier–with 24% using such a team to run their programmatic advertising. This is how fads work: One person does it, then another, then another. For some like EA, it has been the most appropriate decision.
Since the mid-2010s, EA has taken a large amount of its digital media buying operations in-house. Belinda Smith, EA’s head of global marketing intelligence, earlier explained how the decision was actually governed by data security concerns as much as it was by cost-control.
More recently, Smith said the video gaming giant took all its digital media buying in-house in the last two years, including programmatic, search and social as a way to be better, stronger, faster.
“What we got excited about was building a more responsive media-muscle that could capitalize on trends … in near real-time or at least faster than it would be if we didn’t have those capabilities all sitting inside,” she said.
Not everyone can be as nimble as EA. Take one of the largest CPG companies on the planet, for example, P&G, whose chief brand officer Marc Pritchard recently claimed that 30% of its media spend was now planned in-house, with much of these efforts geared toward reducing waste.
The company did not respond to Adweek’s request for comment by press time, but a transcript of Pritchard’s presentation at a Morgan Stanley Global Consumer and Retail Conference on Dec. 3 emphasizes Pritchard’s quest for efficiencies, particularly his desire to reduce overexposure to ads.